Examples

Private police in the US

Public police forces were not imposed on the populace until the middle of the nineteenth century in the United States and Great Britain, for instance, and then only in the face of considerable citizen resistance. Crime victims played the prosecutors' role in England until almost the turn of the century, and they did not yield to public prosecution without a struggle.[2]

A 1970 estimate put private security personnel at roughly equal to public police, but by 1990 there were about 2.5 private security personnel for every public police officer.[3] Between 1964 and 1981, employment by private firms offering protective and detective services increased by 432.9 percent, and the number of firms offering such services grew by 285.5 percent over the same period.

Individuals are also increasingly supplementing government protection with efforts of their own. More and more citizens are buying firearms for personal protection; burglar alarms are being installed and guard dogs purchased. Citizens are barring their windows, learning self-defense, carrying whistles and other noisemakers, and buying self-protection devices. There is a growing business in providing bullet-proof cars and security systems for the powerful and wealthy who fear assassination or kidnapping. There are also less costly activities, such as neighborhood or tenant watches and patrols, and escort groups. A Gallup poll found that during the early 1980s, 17 percent of those surveyed reported at least one of these voluntary crime prevention efforts in their neighborhood.[2]

Security alarm sales increased by about 11 percent per year in 1970, but this growth rate reached 15 percent in 1990. In 1970, one percent of U.S. homes were connected to central alarm systems. By 1990, one in ten homes were. And this trend appears to have accelerated in the 1990s, as has the sale of other electronic equipment to control access, detect intrusion, and protect vehicles, along with closed-circuit television, metal detectors, x-ray devises, and other security technology.[3]

People turn to the private sector when public police and courts are presumably available because there is a growing dissatisfaction with public-sector efforts to maintain social order. Citizens' dissatisfaction arises in part because of a growing belief that the government is not adequately controlling crime. In 1982, the Figgie Report on Fear of Crime found that "most people perceive crime rates as continually increasing and look at any decline as an aberration, a temporary ebb in the inexorably rising tide of petty theft, armed robbery, murder, and international terror." The report also pointed out that crime statistics understate the true level of crime. According to the report, an estimated 60 percent of all personal larceny cases where there is no contact between the thief and his victim go unreported; and less than 50 percent of all assaults, less than 60 percent of all household burglaries, less than 30 percent of household larcenies, and only a little more than half of all robberies and rapes are reported. Thus, the Figgie Report concluded: "These striking statistics are either a measure of the lack of public confidence in the ability of the police to solve crimes or a more realistic appraisal of what is possible…" After all, in 1980 less than 20 percent of reported crimes were cleared by arrest (down from 26 percent in 1960), and in at least one California county only 12 percent of those arrested as felons in 1977 were actually convicted. The U.S. Department of Justice report on crime victimization in 1979 found that approximately 10 percent of unreported crimes were not reported because people believed that the police "do not want to be bothered."

The Figgie Report also found that 80 percent of the study's sample believed that the courts and prison system were ineffective in rehabilitating criminals.[2]

In New Yorks were the "Guardian Angels" established in l978 to patrol the subway. The patrol has grown to an over 700 strong group, with patrols in other cities including Los Angeles, Altanta, Philadelphia, Standford (Connecticut), Jersey City, Hoboken and Newark. The Angels patrol the worst and poorest sections of their cities, the subways and back alleys ignored or neglected by the state police. Unarmed, but highly disciplined and trained in the martial arts, the Angels have brought a much-needed safety into previously lawless areas.[4]

In Oakland, California, crime has soared in recent years. In 2013, robberies are up 54 percent from 2011, according to police records, while burglaries have risen nearly 40 percent. Auto thefts have increased by 33 percent. This led residents to build fences, arm alarms and install security cameras. In greater numbers, they also started hiring private security patrols.

A group of residents on three blocks of the Oakmore neighborhood - just a block away from Mayor Jean Quan's home - were the first to hire private security in 2012 after a burglar tried to enter a home occupied by two children. Their idea caught on. Nate Cook, owner of the firm Intervention Group Security, said his officers patrol 300 homes as of September 2013. That number will rise to 500 in October when the company starts patrolling the Parkridge neighborhood near Skyline High School.

The service isn't limited to the affluent hills neighborhoods. In middle-class Maxwell Park, just northwest of Mills College, 180 residents have banded together to hire a security guard to patrol their neighborhood for four hours a day, five days a week. "It costs each of us about 50 cents a day," said Jose Durado, chairman of the neighborhood council. "As we get 45 new households to join, we get an additional hour of security."[5]

In October, 2013, frustrated Oakland residents have started to use crowdfounding campaigns to finance private security guards. To start the project, $8,200 was needed -- which was raised in two days. A campaign for another neighborhood has raised about $19,700 in a little more than a week. The sudden success of the crowdfunding plans comes after another uptick in crime in an already high-crime year, including an incident in which around 10 people waiting for rides at a casual carpool pickup were held up at gunpoint.

For a four-month trial, the security company asked that 100 households sign up at $20 per month.[6][7]

Gated and enclosed communities

The rise in private crime control is also illustrated by the growing number of enclosed shopping malls, office complexes, and residential buildings created with security as one design goal. A 1997 estimate suggested that 24 million Americans lived in limited-access condominiums, apartment complexes and cooperatives. Beyond that, private residential communities consisting of large numbers of single and/or multiple family homes on private streets, are also increasingly offered with security as one selling point. A 1997 estimate put the number of people in "gated" communities at around eight million.

The case of Starrett City, a gigantic, 153-acre complex in the high-crime East New York section of Brooklyn, helps explain the popularity of such communities. By the 1980s about 20,000 racially and ethnically diverse but largely middle-income residents lived in its 5,881 apartment units in 56 buildings. A 1986 study by Penn State criminologists Edwin Donovan and William Walsh found that Starrett City residents were much more likely to actually report crimes to their security personnel than citizens in general are, and yet Starrett City had only 6.57 reported crimes per 1000 population, compared to 49.86 for the 75th precinct in which Starrett City is located. At the time of the study, Starrett City had a private security force of 54 people, including 34 officers with general patrol duties, a 6-officer K-9 unit, and a 5-officer unit which patrolled in civilian clothes.

Other communities adopting private security see comparable improvement. Critical Intervention Services, private security agency in Florida, provides security to apartment complexes priced to attract low-income tenants. Crime drops by an average of 50 percent after CIS secures a complex (50 where under contract in Miami, Tampa, Jacksonville, and Orlando by 1996). This may be partly attributable to the prodigious community work the agency undertakes. CIS employees play ball with kids, help with homework, distribute Christmas presents to needy youngsters, and otherwise avail themselves to young residents. As the firm's founder, K. C. Poulin, said "once you get to know the kids and their parents, crime goes down."

A 1992 statistical study by Edwin Zedlewski, a senior advisor to the National Institute of Justice, comparing public and private security in 124 Standard Metropolitan Statistical Areas further strengthens the case for private security. The study found that devoting more resources to public police didn't seem to deter more crime, while devoting more to private security did.[3]

Contract police services

A 1972 survey found no city contracting directly with a private firm for all police services, and fewer than 1 percent dealing with private firms for subservice police
functions. This situation has changed dramatically. Local governments now contract with private firms for a wide array of traditional police functions, particularly in the area of "police support" services, including accounting, maintenance, communications, data processing, towing illegally parked cars, fingerprinting prisoners, conducting background checks on job applicants, and directing traffic. Security firms also provide guards for public buildings, sports arenas, and other public facilities. Wackenhut Services, Inc., for example, has a number of contracts with governments. A partial list includes security for courthouses in Texas and Florida, patrols for the Miami Downtown Development Authority, guards for the Miami Metro Rail and the Tri-Rail from West Palm Beach to Dade County, complete police services for the Tampa Airport, and predeparture security for many other airports. The state of Florida contracted with Wackenhut for security guards at all its highway rest stops after a 1993 rest-stop murder of a tourist.

Several local governments have also contracted for complete police services. For instance, in 1975 Oro Valley, Arizona, arranged such a contract with the major provider of contract fire-control services, Rural/Metro Fire Department, Inc. The Arizona Law Enforcement Officers Advisory Council challenged the arrangement, however, arguing that under Arizona law an employee of a private firm could not be a police officer. Rural/Metro could not bear the high court fees required to fight the challenge, so the arrangement ended in 1977. Several other similar contracts have been written elsewhere. Guardsmark, Inc., began providing full police services to Buffalo Creek, West Virginia, in 1976. Wackenhut had contracts with three separate Florida jurisdictions in 1980 and had proposals pending with twenty communities in 1985. Reminderville, Ohio, contracted with Corporate Security, Inc., in 1981. After the entire police force of Sussex, New Jersey, was dismissed due to a drug scandal, the community contracted with Executive Security & Investigations Services, Inc. Government contracting for all police services is, it appears, increasingly recognized as a serious alternative.

For example, the northern section of San Francisco has sixty-two "private police beats" that are "owned" by private "patrol specialists." All have completed police academy training and have full rights to carry firearms and make arrests. However, they are paid by the businesses, homeowners, and landlords on their "beats." Each patrol specialist purchases a beat from its previous owner and then negotiates contracts with each property owner on the beat who wishes to purchase his or her services. The level of attention required by a customer determines the fee.[8]

Private Investigation and Pursuit of Criminals

Many reputable firms provide and employ these services. Insurance companies’ employees investigate many crimes (i.e., if their losses are large enough to warrant investigation costs), and private firms provide similar services to some of these companies. Many other private organizations and businesses also employ private criminal investigators. The American Banking Association and the American Hotel-Motel Association both contracted with the William J. Burns International Detective Agency, for example, because they did not get satisfactory results from public police.

The railroad police, established at the end of World War I as a complete and autonomous police force, have compiled a remarkable record of effectiveness, particularly relative to public police. Between the end of World War I and 1929, freight claim payments for robberies fell by 92.7 percent, from $12,726,947 to $704,262. This success has continued. In 1992, major railroads in the United States employed a 2,565-person security force, which cleared about 30.9 percent of the crimes reported to them. Public police cleared about 21.4 percent of reported crimes that same year, but because of the railroad police’s relative effectiveness an estimated 75 percent of all crimes against railroads are reported to their police, compared to 39 percent reported to public police. Therefore, adjusted for reporting, the clearance rate for railroad police (23.2) was 286 percent higher than that for public police (8.1). Furthermore, arrests by railroad police have resulted in an overall conviction rate of close to 98 percent over the years, roughly two to six times that from public police arrests, depending on the type of crime and the jurisdiction. William Wooldridge (1970) observed that the primary reason for this success is that the railroad police specialize in one area of enforcement, developing "an expertise not realistically within the grasp of public forces".

Another example of private-sector pursuit is in the bail-bonding market, where the quality of the private market’s output can be compared even more directly to a public-sector counterpart. Many alleged criminals must be released prior to trial, due to court delay, limited jail space, and constitutional guarantees of bail. Two primary mechanisms exist for initiating release and ensuring appearance for trial. First, historically, defendants for most crimes have posted a monetary bond. Most do not have enough money to post the bonds, however, so a commercial bail bondsman posts the entire bond in exchange for a fee. Bondsmen lose the bonds if defendants fail to appear in court, so they spend a good deal of time, effort, and money to guarantee appearance. If a defendant flees, a national network of private "bounty hunters" is notified. Bounty hunters’ incentives to find fugitives are strong because they do not get paid unless the fugitives are returned to court.

A "public bail" alternative was developed in the mid-1960s with a stated goal of helping those accused of nonviolent crimes who could not afford to post a bond. However, "it rapidly evolved into an indiscriminate release mechanism to cap the jail population. It has failed miserably to accomplish any of its aims."[8]

Begun in Albuquerque, N.M., in 1976 and now an international organization, Crime Stoppers is a privately organized and funded program to help apprehend criminals and recover stolen property. Residents in a community set up a nonprofit corporation, raise funds and determine the amount of rewards and how they will be paid. Crime Stoppers encourages people to come forward with information by offering both anonymity and money. The organization works closely with police, and police detectives staff a special Crime Stoppers telephone. Callers are assigned code numbers and do not give their names. Over the years, Crime Stoppers estimates that callers encouraged by its program have helped the police to recover $3 billion in stolen property and narcotics and to attain a 97 percent conviction rate for defendants who are tried.

WETIP was founded in 1972 with $14,000 by Miriam and Bill Brownell, a shop owner and a former sheriff's deputy. This nonprofit business has grown to a nationwide operation with $1 million in revenues per year paid by subscribers, service organizations like Kiwanis and Lions clubs and supporting members. In 1993 WETIP received more than 40,000 anonymous crime reports. For example, an insurance company plagued by arson claims can subscribe and obtain arson-related fliers that publicize the 800-47-ARSON hot line. The standard reward for a tip leading to a conviction is $1,000, but a subscribing company can supplement that. In a case in which a Corona, California, sniper murdered a policewoman and paralyzed a passenger in a police car, local firefighter and police associations sweetened the reward to $15,000. WETIP spots ran nightly on a Los Angeles television station and led to the arrest and conviction of the sniper, who ended up on the death row.[9]

In Detroit, the violent crime rate is one of the highest in the country. There is a spike in murders and an increase in justifiable homicides. Citizens are taking the law into their own hands, arming themselves with guns and guard dogs to fend off criminals. Residents in wealthier areas also often hire private security firms to patrol their streets in armored trucks. Business owners at Threat Management Group and Recon Security, which patrol neighborhoods, said business is booming.[10]

Private law enforcement in Britain

The years between 1750 and 1850 saw the development of a multitude of private agencies of law enforcement, ranging from the systematic use of newspaper advertising to professional detectives and thief-catchers. The most significant were associations for the prosecution of felons. These were voluntary associations of citizens which were set up initially to defray the considerable costs of mounting criminal prosecutions. As time passed, they acquired a wider range of functions, particularly crime-prevention and insurance. The association members contributed to funds, in proportion to their ability to pay; the monies were then used to pay for compensation for loss through theft or criminal damage, to recover stolen goods where possible, to cover the cost of criminal prosecutions and the compiling of information against known delinquents and, increasingly, to finance permanent foot-patrols or 'watches'. Between 1744 and 1856 at least 450 such associations were set up. By the 1830s the largest and most successful, such as the Barnet Association, had effectively become private police forces. Evidence shows that they were providing a service to their members which was both cheap and efficient. Nor was their membership confined to the well-heeled.[11]

Private Security in Europe

According to a 2011 report that mapped security services all over Europe, in several countries are the private security forces larger than the police force (marked with a *):[12]

Selected countries:

Ratio security force/population:

Ratio police force/population:

Austria

1/523

1/380

Belgium

1/703

1/266

Denmark

1/1,106

1/503

Estonia*

1/289

1/412

Finland

1/899

1/701

France

1/437

1/271

Germany

1/484

1/326

Greece*

1/376

1/428

Hungary*

1/125

1/380

Ireland*

1/223

1/344

Italy

1/1,260

1/565

Latvia*

1/105

1/300

Luxembourg*

1/185

1/330

Norway*

1/387

1/567

Poland*

1/190

1/388

Romania*

1/229

1/1,050

Spain

1/513

1/213

Sweden

1/467

1/522

Switzerland

1/636

1/463

The Netherlands

1/526

1/461

Turkey

1/4,077

1/220

United Kingdom*

1/170

1/382

Statistic:

European total or average:

Average ratio security force/10,000 inhabitants

± 31.11

Average ratio police force/10,000 inhabitants

± 36.28

Total number of private security companies

± 52,300

Total number of private security guards

± 2,170,589

South Africa

South Africa was by one almanac described as "the world's most dangerous country" outside official war zones. In the 1990s murder, rape, and robbery rates have all doubled. According to official statistics for 1997, South Africa had 63 murders and 134 rapes per 100,000 people, compared to seven murders and 36 rapes in the United States. There were 258 car thefts per 100,000 South Africans, 866 housebreakings, and 601 assaults. Appalling as these numbers are, they probably understate the crime problem substantially, since polls indicate that most South Africans do not trust the police. A 1997 survey by the Human Sciences Research Council, a quasi-government agency, found that about one-fifth of crime victims do not contact police.

The reluctance to report crimes may be partly due to the fact that in the last few years police participation in crime has skyrocketed. In 1997 a total of 15,326 police officers, almost 14 percent of the national force, were charged with crimes. Meanwhile, officials of the African National Congress, the ruling party, have been implicated as members of criminal gangs responsible for dozens of armored truck heists.

Given the government's manifest failure to deal with surging crime, many South Africans are turning to private alternatives. These include not only gated communities for the wealthy but security services and self-help arrangements that benefit the middle class and poor.

The Residents Association of the Honeysuckle, an upper-class white area of Johannesburg, has raised about $16,000 to secure the neighborhood with gates and guards. It has also taken over park maintenance and installed its own street lights. Since residents took these actions two years ago, says association Chairman, the neighborhood has not had a single incident of crime.

In neighboring Sandton, also a wealthy area, residents are experimenting with road closures, stopping through traffic with barriers. Steve Margo of Sandton Precinct, a civic group, says: "The closures are working. People are now working together, walking in the streets, jogging and riding bicycles in safety."

In Kensington, a middle-class Johannesburg suburb, residents have contracted with a private security firm, for armed protection. The firm hired about 90 previously unemployed men to patrol the streets, covering some 3,500 homes. Each street has its own bank account, and residents contribute to pay for the guard on their street. At the same time, residents save money as a result falling household insurance rates. The Johannesburg Saturday Star reports another side effect of the program: "Before the new system, neighbors were largely strangers. Now, most people know each other and there are regular street parties."

Car thefts and armed hijackings are common in South Africa, particularly in Johannesburg. In response to the wave of car thefts, shopping malls and business districts in South Africa have hired security guards to patrol their parking lots. These guards are paid not by the malls or the stores but by tips from people who park in the lots. The pay must be adequate, since there seem to be plenty of security people in every lot of any size.

One high-tech solution to carjackings is satellite tracking systems. A car owner pays a monthly subscription fee for the service, which requires a transponder planted somewhere in the vehicle. If the car is stolen or hijacked, the theft is reported to a central office. The satellite immediately begins tracking the car, and security personnel and police are called in. Recoveries within 15 minutes of the theft are not uncommon. Depending on the value of the car, the cost of the tracking system may be covered by savings on auto insurance.

Like car owners, farmers have responded to crime with a new alarm system. The murder rate on South African farms, which are often targeted by criminal gangs, is 120 per 100,000, much higher than the national average. Farmers have armed themselves, installed electric fences, and purchased guard dogs, but criminals continue to find ways around these measures. Now farmhouses have been turned into fortresses, with independent radio systems linking them to other farms in the area. If a farm is attacked, an alarm is raised, and other farmers pick up their guns and come to the rescue.

A different sort of anti-crime association has emerged in downtown Johannesburg. The Central Johannesburg Partnership, a nonprofit corporation formed by business owners, provides "private urban management services" in four downtown areas totaling 50 blocks, or 10 percent of the inner city. The services include security, street cleaning, vending management, and miscellaneous maintenance tasks, such as painting light poles and electric boxes. Operating with a yearly budget of about $1 million funded by contributions from the businesses it serves, the CJP employs about 100 security guards and 30 street cleaners, with a office staff of six.

The first area managed by the CJP was the Central Improvement District, created in late 1993. In 1992 that area averaged 27 muggings a month; in all of 1997, by contrast, it had only three. Most of the people who live and work in this neighborhood are black; many are middle class, but a significant number are quite poor. The CJP's professional services contrast sharply with the protection available in many black townships, where residents have almost no confidence in the police and routinely take the law into their own hands, administering "street justice" with beatings.[13]

Other countries

Private policing is quite common in some other countries. For instance, in Switzerland one firm, Securitas, provides police for more than thirty villages and townships.[8]

Online payment systems

PayPal was founded in 1999 to facilitate payments between any two parties with an email address. No costly credit card accounts or merchant terminals were needed. What PayPal did not foresee was the degree of fraud it would be subjected to. Fraudsters from all over the world would hack into accounts and transfer small amounts of money out of each one. By 2001 PayPal had gross revenue of $14 million per year, but was losing $10 million per month to fraudsters. At first the company went to the government to stop the fraud and recover the money. But in short order PayPal realized that relying on the government to solve its problems was hopeless.

The government had little ability to identify who the anonymous fraudsters were, and when PayPal identified them there was a "dispute between the FBI office in San Jose and San Francisco over which of them had jurisdiction over Kazakhstan." The government simply lacked the expertise to do anything to protect this new kind of market.

Rather than sitting around and hoping that government would solve its problems, PayPal took matters into its own hands. It developed algorithms that could learn over time and became quite good at approving legitimate transactions and preventing bad ones. PayPal had to weigh the risk of letting bad transactions go through with the cost of turning down good ones. Rather than treating the problem of fraud as a legal problem, the company treated it as a risk management one. PayPal basically assumed the risk of fraud on behalf of customers and profited immensely by reducing it. PayPal now processes $100 billion worth of transactions per year and has an industry leading loss rate of only 0.5 percent. It prices the cost of fraud into each transaction, and that gives the company incentives to minimize it.

Payment processors associated with American Express, MasterCard, and Visa followed suit and rely on scoring systems to estimate the probability that any transaction is fraudulent. You don’t have to worry too much about being defrauded by an online merchant when you know that your credit card company takes steps to protect you.[14]